The role of the chief financial officer in Canada is rapidly evolving from traditional technician to strategic executive, according to a study by the Canadian Financial Executives Research Foundation (CFERF) and Knightsbridge Human Solutions.
While CFOs have a wide variety of financial, compliance and regulatory responsibilities, an increasingly important aspect of their role now is to support executive decision-making and to act as a strategic leader, found Beyond the Numbers: The Evolving Leadership Role of the CFO. This means CFOs would benefit from broadening and developing key skills such as communication, relationship-building and team investment in addition to their traditional areas of expertise.
"The role of the Canadian CFO has evolved into a far more important C-level position than it was in the past. CFOs must now be strategic leaders in their organizations," said Michael Conway, chief executive and national president of Financial Executives International (FEI) Canada, which runs CFERF. "Therefore, the skills and experience required of these individuals is significantly more than it once was."
Several external forces are driving the role of the CFO from where it stands today to where it needs to be, found the study, based on a survey of 263 senior financial executives. Examples of such forces are:
• the growing complexity and competitiveness of business
• the increasing amount of time spent on compliance issues regarding governance and regulatory requirements
• the need to find and retain the best talent.
CFOs need to adapt to their evolving role by broadening their knowledge base in areas of risk management and corporate governance, global markets and translating strategic direction into clear organizational goals, found the study, which also used insights from interviews with CEOs and board members and research forums held in Winnipeg, Vancouver, Toronto and Montreal.
"The leadership skills CFOs need to be successful in the future are changing," said Vince Molinaro, managing director of leadership solutions at Knightsbridge. "The ability to communicate a vision and strategy that creates enterprise value, translate that into clear team goals and help team members build an enterprise perspective will become increasingly important."
There are important actions current and aspiring CFOs should take to fulfill the expectations of their evolving role, said the study. They need to upgrade talent within their teams, spend more time with customers to achieve a broader understanding of their organizations and spend more time with business unit leaders and COOs to develop strategy together.